Since the SNP seized power north of the border, Scotland’s construction industry has been bursting with optimism. Joey Gardiner asks what has changed and how long it will last. He also speaks to the man charged with pushing its massive growth and development programme through

Non-Scots may not have noticed, but something has changed north of the border. Most people probably know that after the elections last May, the Scottish National party took the risky strategy of trying to rule without an overall majority. Most may even have noticed that Alex Salmond, the party’s leader, changed the name of the “Scottish executive” to the “Scottish government”. But those in London, Manchester or Leeds probably have not realised the scale of the shift that is taking place in Scotland and the impact it could have on development, housing and regeneration.

It is not only that the government has reformed the institutions that fund regeneration and housing – Communities Scotland, a sort of tartan version of the planned English Homes and Communities Agency, was abolished and regeneration agency Scottish Enterprise hacked back. Neither is it just that the government has raised the annual housebuilding target from 25,000 to 35,000 a year. Or that a £4.2bn road bridge over the Forth has been agreed to. It isn’t even that Glasgow is planning to spend £3bn on transport infrastructure after winning the 2014 Commonwealth Games.

What has really made the difference is the change in overall aspiration that the SNP has brought. The party says it can raise annual economic growth in Scotland from an average of 1.8% over the past 25 years to nearer 3%, mainly by slashing business taxes.

All in all, it is enough to make an estate agent take an interest in politics – Andrew Oswald, partner at Knight Frank in Glasgow, says: “For once, we’ve got someone leading us who believes in the country, and doesn’t just moan about how bad a deal we’re getting.”

Certainly, the feeling from developers and housebuilders is palpably different to that in England, where a weary electorate is sensing that it may be reaching the fag-end of one administration and developing a queasy feeling about what might be next.

Part of this may be, as Kenneth Ross, chair of Scottish mixed-use developer Elphinstone, puts it, the result of a “huge sense of relief” that the SNP seems to be okay. Before the election, its politicians were virtually unknown to the Scottish business community and many were profoundly worried about the impact of a move towards independence.

To counter this fear of the unknown, SNP ministers have made themselves more accessible to developers, and have sought to reassure them on the economy. Realising that much of the opposition to independence was from Scots worried about whether the country could survive as an economic unit, Salmond decided to cut taxes, talk up growth and strike deals with Tory MSPs to get his budget through the Scottish parliament.

David Smith, leasing director at Land Securities in Scotland, has noticed the change: “The politicians are more accessible now; their party is more stable than Labour. Salmond’s all about the economy. It’s great.”

So while the minority SNP government may not have secured a landslide last May, the goodwill it has generated since and the virtual collapse of Labour has given it the power to drive through its agenda. Even the civil servants seem to have a spring in their step; Alisdair McIntosh, head of regeneration policy at the Scottish government, waxes lyrical about a “spirit of possibility”.

For once, we’ve got someone leading us who believes in the
country, and doesn’t just moan about how bad a deal we’re getting

Andrew Oswald, Knight Frank

The SNP’s first job was to respond to growing housing pressures. Steady but unexceptional growth in prices over the past 30 years has been replaced since 2003 with steep rises – 72% between 2002 and 2006. With production increasing 2% in the same period, the Scottish government says this is pushing affordability to the limit. The response was to set a goal of building 35,000 homes a year, a 40% increase on current levels and a rate of build last seen in 1976.

Its charm offensive with the private sector has not been hurt by the major reform of Scottish Enterprise and the abolition of Communities Scotland. The bodies will not be missed. The idea is for the work of Communities Scotland – funding social housing and gap-funding regeneration schemes – to be taken back in-house by the Scottish government.

Scottish Enterprise, The £500m-a-year regional development agency, will now work on only the largest regeneration projects. The power and funding for all other schemes will be transferred to councils.

Land Securities’ Smith says: “Scottish Enterprise is pretty much invisible to us.” Knight Frank’s Oswald makes the same point about Communities Scotland.

Brian Clarke, joint managing director of Park Lane, the developer behind the massive waterside regeneration of Renfrew to the west of Glasgow, asks: “The question is what it spent its money on. It seemed to be very difficult for people to make decisions; lots of money went on reports and consultants.”

So, the industry appears to be happy with the changes, even if there are still important matters to resolve, such as how the break-up of Scottish Enterprise will be managed (see Stewart Maxwell interview). Furthermore, no amount of optimism can shield Scotland from the cold economic winds blowing through Britain’s housing and commercial markets.

There is a sense that the downturn will not strike Scotland, which has seen steady but not exceptional growth in house prices over the past two decades, but developers are reporting a huge change in the attitude of the banks. Oswald says: “They are making it more difficult to lend, and they’re even changing lending terms mid-deal. The buy-to-let market has almost stopped.”

Moreover, there are signs that the SNP’s honeymoon period is ending. It has now been in office for almost a year and Clarke says it still needs to address the issue of building regulations. At the moment these are handled by councils, which leaves big developers with a plethora of rules to comply with.

In addition, it is not clear how the aspirations to raise housing output, contained in the SNP’s Firm Foundations document, will be delivered. The Scottish Property Federation has written to the government expressing concern that the rhetoric is not being matched by action. In particular, it is worried about the decision in recently issued planning guidance (SPP3) to allow councils to allow “mobile demand”, whereby the housing targets of one council can be met by another. This, they fear, fear this is a recipe for inaction and delay.

The question is what Scottish Enterprise spent the money on? Lots of money was going on reports and consultants

Brian Clarke, Park Lane

For the moment the SNP seems to have enough time and goodwill behind them to sort these issues out, but it needs to take advantage of them – they will not last forever.

A man with a plan

Since the SNP took power, Scotland’s housing minister has scrapped one major organisation, overhauled another and pushed through controversial planning guidance in his drive to create a whole new standard of homes. He tells Joey Gardiner what happens next

Stewart Maxwell takes his job pretty seriously. The only time the Scottish housing and regeneration minister smiles during our meeting is when I mistakenly call Communities Scotland, Communities England. Even then, I get the sense he’s not so much laughing with me, but at me and my clumsy Sassenach blunder.

And rightly so. It is a serious job and he’s a man on a mission – to ensure that the privations suffered by his family in Glasgow before and after the war aren’t suffered again. Growing up in the east end of the city, a short distance from the plush Scottish government offices in which we meet, his parents endured what was known as “single ends”, which means the whole family lived in one room of a tenement.

In the fifties these slums were cleared, only to be replaced by Sir Basil Spence’s equally notorious Queen Elizabeth flats in the Gorbals. Although his family had moved to the relatively wealthier Greenock area by the time Maxwell was born, the tales left a big impression on him. “It’s the stories I grew up with and I have a very emotional reaction to them,” he says. “My family were told the flats would be a new dawn, but they just found themselves in new slums.”

Now, he has a chance to make a difference in a way that never seemed possible when he was computer systems manager at the Strathclyde fire brigade four years ago. So far the Scottish National party has won the approval of the development community with its pro-business agenda and desire to rip up what it sees as inefficient bureaucracies.

The housing output is to rise by more than a third. But Maxwell’s ambitions go further than that. He wants nothing less than a whole new standard of housing in Scotland – which means big improvements not just in the numbers, but in the design and environmental standards of new homes.

Like many in the Scottish government, Maxwell was a relative unknown when the SNP came to power last May. Since then, he has been busy meeting those people, particularly in the private sector, who can deliver his policy ambitions. This has gone down well in the industry. “I’m glad that people appreciate that we have been much more open and tried to engage with people,” he says. “We set out with those intentions.”

My family were told the flats would be a new dawn, but they just found themselves in new slums

Stewart Maxwell

But it’s not all talk. He has also made some key decisions in his 10 months in office – probably the most striking of which was the abolition of the government’s delivery body for regeneration and housing, Communities Scotland. The move has heartened many in the private sector, who say the agency provided little help in delivering homes, but has also left people confused.

So why did Maxwell scrap the body? He doesn’t mince words: “Communities Scotland was a bureaucratic block, it actually slowed the process down.” Who will make the funding decisions now? “In future, the people in charge of directing funding will be inside the government, part of the government structure. The buck will stop there.”

The situation with economic regeneration agency Scottish Enterprise is slightly different. The body will retain control of major projects, but all local regeneration schemes be passed to local councils. This divide is causing some angst at the moment. One council planner says he was worried they would be passed poison chalices – that is, responsibility for unrealistic projects without adequate funding – but for Maxwell, this is all part of a major devolution of power from central to local government. Any uncertainty will be cleared up this month, before the end of the financial year. Before that, though, he’s not going to comment.

Indeed, Maxwell is sanguine as only a politician can be about many things. He isn’t worried, for example, about the economic downturn, because he believes that Scotland, under the SNP, can buck the trend. His concerns are more about growth, such as whether the Scottish economy has the people with the skills to build the homes he needs. “What will be the impact of very large construction project in the rest of the UK, for example, the Olympics?” he asks.

He is not concerned about the impact of new planning guidance which will allow councils to negotiate with each other to meet their housing targets with developments in neighbouring authorities – something the Scottish Property Federation says it is “extremely concerned” will cause planning delays. He’s been assured by Scottish councils that they will be able to make agreements, he says, and he has no reason to doubt them. “People just don’t operate along local authority boundaries,” he says, justifying the move. “That’s just not the way people live and not the way they think. We’re very clear that wider area co-operation must be part of the process.”

He does accept, though, that there has been a problem in the type of housing that has been built in Scotland in recent years – for example, the two-bedroom investor flats of Glasgow Harbour and Edinburgh Waterfront. On these, he is fairly uncompromising in his message to developers: “The days of vast blocks of flats are coming to an end. We’ve got to have many more mixed communities and more mixed housing on sites. Developers are aware that this has to change.”

At some point these ambitions have to be turned in to reality – and there are signs that this is the time. Maxwell accepts that, and claims the government will shortly be publishing more details of how to deliver the government’s housing ambitions, along with its ideas for new town developments.

And he’s willing to be judged by results. “Our intentions are clear, but know us by our actions as well, because these will follow,” he says. “It’s only been 10 months. We’re going as quickly as we possibly can.”

The SNP's progress so far

Housing Starts are to increase from 25,000 to 35,000 by 2015
Annual economic growth To be level with England (2.3%) by 2011 and level with other smaller EU countries by 2017
Communities Scotland Social housing funding body abolished
Scottish Enterprise Body stripped of responsibility for skills, training and averything but the largest national regeneration projects
Regeneration funding A £140m package will be administered by councils
M74 Motorway link to be funded with £445m
Urban regeneration companies

  • The Clyde Gateway Partnership, which covers the area of the proposed 2014 Commonwealth Games, has been given £62m
  • Riverside Inverclyde will receive £19m between 2008-11 to regenerate Inverclyde, a town west of Glasgow
  • The Irvine Bay Urban Regeneration Company, which covers five towns to the south-west of Glasgow, will receive £6m.
  • Clydebank Re-built will receive £5m next year.

Infrastructure Nine national planning priorities have been laid out, including expansions to Glasgow and Edinburgh airports and a Forth road bridge